Federal Court Limits FinCEN Authority Over Real Estate Transaction Reporting
Case Study: Flowers Title Companies, LLC v. Bessent
No. 6:25-cv-00127 (E.D. Tex. Mar. 19, 2026)
A title company challenged the FinCEN (Financial Crimes Enforcement Network) Residential Real Estate Reporting Rule that required certain real estate professionals, including title companies, to report certain cash transactions where the buyer was a trust or entity. The rule aimed to combat money laundering by collecting detailed information about buyers and transactions. The Court here held that FinCEN exceeded its authority under the Bank Secrecy Act and struck down the reporting requirement.
TAKEAWAYS:
The court rejected the idea that non-financed (cash) transactions can be broadly labeled as suspicious and found that FinCEN failed to explain or show how these types of transactions are categorically suspicious.
Federal agencies can only act within the powers granted by Congress. Here, the court found that FinCEN overstepped by creating a broad reporting rule that was not clearly authorized by the Bank Secrecy Act. The Act does give FinCEN the authority to require financial institutions to maintain “procedures” to comply with the Act, but not the authority to require these specific reports.
About the writer: Prior to joining Illinois REALTORS® in 2022, Victoria (Vicki) Munson was an attorney in private practice focusing on real estate and estate planning matters. She enjoyed assisting buyers and sellers in bringing their transactions to the closing table. Victoria earned her bachelor’s degree from Western Illinois University and her Juris Doctor from The John Marshall Law School.
